PV of periodic payments, statement of cash flows - both methods

See attached file for proper format.

Number 1
Compute the present value of the following periodic amounts due at the end of the designated periods.

a) $57,500 receivable at the end of each period for 8 periods compounded at 12%.
b) $77,700 payments to be made at the end of each period for 16 periods at 9%.
c) $85,100 payable at the end of the seventh, eighth, ninth, and tenth periods at 12%.

Number 2
Condensed financial data of Dora Boots Co. for 2010 and 2009 are presented below.

Attachments

Solution Preview

See attached file.

PV and Cash Flow Statement

Number 1:
a) $57,500 receivable at the end of each period for 8 periods compounded at 12%.
Answer:
Present Value (PV) of receivable can be calculated by the use of following formula: (Cash Outflow) * (PVFA 8, 0.12) (Peterson and Fabozzi 2002).
PV = $57500 * 4
PV = $285,660

b) $77,700 payments to be made at the end of each period for 16 periods at 9%.
Answer:
Present Value (PV) of payable can be calculated by the use of following formula: (Cash Outflow) * (PVFA 16, 0.09) (Peterson and Fabozzi 2002)
PV = $77700 *8.313
PV = $645,920.1